Filing # 48667963 E-Filed 11/08/2016 05:15:07 PM

IN THE CIRCUIT COURT OF THE

FIRST JUDICIAL CIRCUIT IN AND
FOR WALTON COUNTY, FLORIDA
U.S. BANK NATIONAL ASSOCIATION AS
TRUSTEE FOR MASTER ADJUSTABLE
RATE MORTGAGES TRUST 2007-2
MORTGAGE PASS-THROUGH
CERTIFICATES SERIES 2007-2,
Plaintiff,
v.
Case No. 2014-CA-000741
C. DAVID PEACOCK; BETTY J.
PEACOCK, et al.,
Defendant(s).
___________________________________/
PLAINTIFF'S RESPONSE IN OPPOSITION TO DEFENDANTS'
MOTION FOR SUMMARY JUDGMENT
I. INTRODUCTION
Relentless in their attempts to win a free home, defendants' David and Betty Peacock
(Peacocks) motion for summary judgment challenges U.S. Bank's1 standing to foreclose. The
basis of Peacocks' motion disregards well-established Florida law. The Peacocks allege the
subject mortgage loan was not timely transferred into the trust, per the terms of a pooling and
servicing agreement (PSA), and so U.S. Bank cannot own the mortgage loan and cannot
foreclose.

They improperly equate being a note holder with being an owner of the note.

Ownership is irrelevant to U.S. Bank's standing as the note holder, and the Peacocks have no
legal right to challenge compliance with the PSA. Ownership and compliance with securitization
documents have no relevance to this case, and do not effect U.S. Bank's standing. The Peacocks'
motion is without legal support and must be denied.

U.S. Bank refers to plaintiff U.S. Bank National Association as Trustee for Master Adjustable Rate
Mortgages Trust 2007-2 Mortgage Pass-Through Certificates Series 2007-2

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II. BACKGROUND FACTS

U.S. Bank sued to foreclose the mortgage on the Peacock's home because they have not
made their loan payments since September 2010. U.S. Bank's sole basis for its standing is as the
note holder. U.S. Bank alleged it "holds the note and mortgage." (Compl. 3.) As part of its
verified complaint, U.S. Bank filed a certification of note possession, showing its attorney
possesses the note, bearing an indorsement chain ending in blank. The complaint is silent as to
ownership of the note or mortgage.
III. LEGAL ANALYSIS
A.

Standard for Summary Judgment.

A movant is entitled to summary judgment "'if the pleadings, depositions, answers to

interrogatories, admissions, affidavits, and other materials as would be admissible in evidence on

file show that there is no genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.'" Taylor v. Bayview Loan Servicing, LLC, 74 So. 3d
1115, 111617 (Fla. 2d DCA 2011) (quoting Fla. R. Civ. P. 1.510(c)). The movant has the
burden to prove the absence of a genuine issue of material fact, and this court must view 'every
possible inference in favor of the party against whom summary judgment has been entered.'" Id.
(citation and quotation omitted). And, "if the record raises even the slightest doubt that an issue
might exist, that doubt must be resolved against the moving party and summary judgment must
be denied." Id. (citation and quotation omitted).
B.

A Note Holder's Ownership of the Note is Legally Irrelevant.

A plaintiff's standingor entitlementto foreclose may be established several ways

under Florida's Uniform Commercial Code (UCC), 673.3011, FLA. STAT. See Pennington v.
Ocwen Loan Servicing, LLC, 151 So. 3d 52, 54 (Fla. 1st DCA 2014) (recognizing statute
provides several means to establish standing).

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A plaintiff has standing as a note holder (i.e., a person in possession of the note specially
indorsed to it or indorsed in blank). 673.3011(1). See e.g., Kyser v. Bank of America, N.A.,
186 So. 3d 58 (Fla. 1st DCA 2016) (standing as note holder).
A plaintiff has standing as a non-holder in possession with rights of a holder.

673.3011(2). See e.g. Lacombe v. Deutsche Bank Nat'l Trust Co., 149 So. 3d 152 (Fla. 1st DCA
2014) (plaintiff seeking to enforce note specially indorsed to another entity).
A plaintiff has standing to enforce a lost note (i.e., a note not in plaintiff's possession), if
plaintiff was entitled to enforce the note, or obtained ownership of the note from a person
entitled to enforce the note, when the loss occurred. 673.3011(3), 670.3091, FLA. STAT.
Seidler v. Wells Fargo Bank, N.A., 179 So. 3d 416 (Fla. 1st DCA 2015) (lost note).
U.S. Bank allegedand will proveits standing to foreclose as the note holder. A note
holder is a person who has possession of the original note, indorsed in blank.2 See Kyser, 186
So. 3d at 60 (standing may be established by proof plaintiff was in physical possession of the
note, either specially indorsed to it or in blank, when suit was filed). The mortgage is equitably
assigned with the note as a matter of lawthe mortgage follows the noteso the person who
holds the note is entitled to foreclose the mortgage. See Kiefert v. Nationstar Mortg. LLC, 153
So. 3d 351, 352 and n.2 (Fla. 1st DCA 2014) (a note holder is also the "holder" of the mortgage
because the mortgage follows the note) (citations omitted).3
Thus, there are only two relevant facts for U.S. Bank's entitlement to enforce the note:
(1) its possession of the original note when suit was file and (2) the note was indorsed in blank at
2

673.3011, FLA. STAT. (note holder entitled to enforce); 671.201(21), FLA. STAT. (definition of
holder as one in possession of the instrument payable to bearer); 671.201(5), FLA. STAT. (definition of
bearer instrument as one in possession indorsed in blank or payable to bearer).
3

While courts have found assignments of mortgages together with the note may establish standing to
foreclose, U.S. Bank is not relying on this theory. See Kyser, 186 So. 3d at 60 and cases cited (discussing
assignment of mortgage as basis for standing).

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the time suit was filed. See Seidler, 179 So. 3d at 420 (plaintiff's "standing, as holder under
section 673.3011(1) of the Florida Statutes, could thus have been proved upon a showing that
[plaintiff] possessed the note, as indorsed . . . when the complaint was filed" but lack of
possession destroyed this basis for standing); Kyser, 186 So. 3d at 60 ("If the foreclosure
plaintiff is not the original, named payee, the plaintiff must establish that the note was endorsed
(either in favor of the original plaintiff or in blank) before the filing of the complaint in order to
prove standing as a holder.") (quoting Kiefert, 153 So. 3d at 353); Ham v. Nationstar Mtg. LLC,
164 So. 3d 714, 718 (Fla. 1st DCA 2015) (plaintiff claiming standing as a note holder must show
both possession and proper indorsement at time suit was filed); Kelly v. Bank of New York
Mellon, 170 So. 3d 145 (Fla. 1st DCA 2014) (plaintiff must prove the indorsement on the note
occurred before suit was filed to prove standing as note holder); See e.g. Wells Fargo Bank, N.A.
v. Ousley, 2016 WL 3268330 at *1 (Fla. 1st DCA June 15, 2016) (plaintiff has standing if it is the
note holder and the "holder of a note with a blank endorsement is only required to show
possession of the note at the time the complaint was filed").4
Ownership of the note is irrelevant to a note holder's standing to enforce the debt and
foreclose. See Wells Fargo Bank, N.A. v. Morcom, 125 So. 3d 320 (Fla. 5th DCA 2013)
(ownership is irrelevant to establish standing as note holder; plaintiff only needs to prove
possession of indorsed note); 673.3011, Fla. Stat. ("A person may be entitled to enforce the
instrument even though the person is not the owner of the instrument or is in wrongful possession
of the instrument.") (emphasis added); Angelini v. HSBC Bank USA, N.A., 189 So. 3d 202, 203

U.S Bank's standing is shown by its attaching a copy of the note, indorsed in blank, to its complaint.
Clay County, 152 So. 3d at 85 (attaching a copy of the note indorsed in blank to the complaint "was
sufficient to establish as a matter of law that appellee had standing to bring the foreclosure action") (citing
Morcom, 125 So. 3d at 322). U.S. Bank will file the original note with the Court prior to entry of final
judgment.

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(Fla. 4th DCA 2016) ("[O]wnership, assignment, or transfer of the note is important to the
analysis of standing only when the plaintiff is a nonholder in possession of the note with the
rights of a holder.") (emphasis in original) (internal quotations, citation omitted).5
Any reliance defendants may place on the 1st DCA's statement in Mazine about owning
the note is misplaced. Mazine v. M&I Bank, 67 So. 3d 1129 (Fla. 1st DCA 2011). Its statement
that "a person seeking foreclosure must present evidence that it owns and holds the note and
mortgage" is dicta as it relates to ownership. Id. at 1131. Ownership was not an issue in that
case. The court correctly stated that, because "the note is a negotiable instrument and because a
mortgage provides the security for the repayment of the note, the person having standing to
foreclose a note secured by a mortgage may be either the holder of the note or a non-holder in
possession of the note who has the rights of a holder." (citing 673.3011, FLA. STAT.). As the
5th DCA held in its 2013 Morcom decision, ownership is not relevant for purposes of standing as
a note holder under "the now-instructive and binding Florida UCC." Morcom, 125 So. 3d at 322
More recent cases by the 1st DCA (cited above) show ownership is not relevant to standing, and
the 1st DCA has cited to Morcom on standing issues. See e.g., Clay County Land Trust v.
JPMorgan Chase Bank, Nat'l Ass'n, 152 So. 3d 83, 84 (Fla. 1st DCA 2014) (plaintiff's possess of
the note indorsed in blank "is sufficient by itself to establish standing, even without a formal
assignment of the mortgage.") (citing Morcom, 125 So. 3d at 322). "[O]wnership . . . of the note
is not the issue, with regards to standing, unless the note is not in bearer form or is payable to
someone or some entity other than the plaintiff filing suit." Angelini, 189 So. 3d at 203 (internal
5

Ownership may be a separate ground for standing to foreclose, but U.S. Bank is not asserting any
ground other than being a note holder so ownership is irrelevant. Angelini, 189 So. 3d at 203 (ownership
relevant to non-holder in possession theory but not holder theory). See also Hunter v. Aurora Loan Serv.,
LLC, 137 So. 3d 570, 574 (Fla. 1st DCA 2014) (recognizing several ways to prove standing; plaintiff
failed to prove it possessed the note "via valid assignment, purchase of the debt, or effective transfer." )
(emphasis added); Lacombe, 149 So. 3d 152 (Fla. 1st DCA 2014) (plaintiff asserted standing based on its
owning the note, indorsed to another entity, but failed to prove standing under any theory).

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quotations, citation omitted); Ham, 164 So. 3d at 716 (a blank indorsement made the note
payable to the bearer).
Similarly, when and how a person comes into possession of the note is wholly irrelevant
to standing as a note holder. See 673.3011, Fla. Stat. ("A person may be entitled to enforce the
instrument even though the person is not the owner of the instrument or is in wrongful possession
of the instrument.") (emphasis added). The only operative questions of possession are whether
plaintiff possessed the note when suit was filed and at trial. See Kyser, 186 So. 3d at 59
(standing must be established at the time foreclosure suit is filed and at trial.)
Despite this clear law, the Peacocks' equate owning the note with being the holder of the
note. This is inconsistent with the law. Accordingly, the Peacocks are not entitled to summary
judgment as a matter of law.
C.

Borrowers Have No Legal Right To Rely on the PSA.

The Peacocks' allegations regarding compliance with the PSA are irrelevant to U.S.

Bank's standing as the holder of the note and do not create a basis for the entry of summary
judgment. Courts throughout the countryincluding in Floridahave held borrowers lack
standing to challenge or require enforcement of the PSAs or other agreements between lenders,
servicers, and pools of securitized loans, because the borrowers are not third party beneficiaries
of such agreements.

See Castillo v. Deutsche Bank Nat'l Trust Co., 89 So. 3d 1069 (Fla. 3d

DCA 2012) (borrower is not a party to a PSA and has no standing to assert PSA non-compliance
as a ground to avoid foreclosure.); Jepson v. Bank of New York Mellon f/k/a The Bank of New
York, as Trustee etc., 816 F. 3d 942 (7th Cir. 2016) (borrower "lacks standing to raise any
challenges based on alleged violations of the PSA" to avoid foreclosure ); Howell v. PHH Mortg.
Corp., 2015 WL 5829673 (M.D. Fla. Oct. 1, 2015) (borrower has no standing to challenge either
the validity of the mortgage's assignment or transfer based on defendant's failure to comply with

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a PSA); Rhodes v. JPMorgan Chase Bank, N.A., 2012 WL 5411062 at *4 (S.D. Fla. Nov. 6,
2012) (same); In re Canellas, 2012 WL 868772 at *3 (M.D. Fla. March 14, 2012) (only parties
to the PSA, third party beneficiaries, or investors of the pooled mortgages have standing to
challenge validity of assignments of mortgages for failure to comply with the PSA). Accord
Clay County Land Trust v. JPMorgan Chase Bank, Nat'l Ass'n, 152 So. 3d 83, 84 (Fla. 1st DCA
2014) ("Because appellant was not a party to the mortgage, appellee correctly asserts that
appellant does not have standing to challenge any violation of these mortgage terms.")
The recent Jepson case is particularly instructive because the court analyzed and rejected
the identical arguments raised by the Peacocks in this case.

816 F. 3d 942.

The

mortgagor/borrower in Jepson argued the trustee of a securitized mortgage loan could not collect
on the note or foreclose because the transfer of her note and mortgage were missing
indorsements of intervening transfers and her loan was transferred into the trust after the closing
of the trust. Id at 946. The Seventh Circuit analyzed New York law applicable to the PSA. It
found mortgagors/borrowers lacked standing to challenge compliance with the PSA because the
borrowers were not third-party beneficiaries under the PSA. Id. at 946. "New York courts have
uniformly held that a mortgagor whose loan is owned by a trust is not an intended beneficiary of
a trust, and does not have standing the challenge the trustee's possession or status as assignee of
the note and mortgage based on purported noncompliance with certain provisions of a PSA." Id.
(internal quotations, citation omitted). It also found "mortgagors are not even incidental
beneficiaries of a trust, as their interests are adverse to those of the certificate holders." Id. The
court also rejected the argument the acts of the trust were void and ultra vires. Id. at 947. The
court concluded the transfer of the note into the trust, based on the language of the PSA, only
made the transfer voidable, not void. Id. 947, 948. As a result, borrower/mortgagor did not have
standing to challenge the transfer of the note and mortgage into the trust.

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The overwhelming case law shows the Peacocks have no rightno standingto
challenge compliance with the PSA. Since they lack standing to challenge compliance with the
PSA, the Peacocks' motion for summary judgment must be denied as a matter of law.
D.

U.S. Bank Possessed the Note at Filing.

U.S. Bank alleged possessed the note bearing an indorsement chain ending in blank at the

time of filing. When the note copy attached to the complaint is identical to the blank-indorsed
original later filed with the court, it is sufficient to establish the plaintiff]had actual possession of
the note at the time the complaint was filed and, therefore, had standing to bring the foreclosure
action, absent any testimony or evidence to the contrary. Ousley, 2016 WL 3268330 at *1. U.S.
Bank's possession of the original note at the time of filing is sufficient to establish that it was the
lawful holder of the Note and had standing to bring this action. See id.
U.S. Bank will demonstrate its standing at trial by its physical possession note bearing an
indorsement chain ending in blank. The evidence will also show U.S. Bank has been disbursing
funds for taxes and insurance on behalf of the Peacocks, which "is a noteworthy factor in
determining standing, as financial institutions are not known to incur expenses on behalf of
properties for which they do not hold an interest." Peuguero v. Bank of America, N.A., 169 So.
3d 1198, 1202 (Fla. 4th DCA 2015). Since U.S. Bank has standing to enforce the note, the
Peacocks' motion for summary judgment must be denied as a matter of law.
V. CONCLUSION
The Peacocks' motion is predicated on legal theories contradictory to well established
Florida law. Ownership of the note is irrelevant to U.S. Bank's standing as the holder of the note.
Further, the Peacocks have no standing to challenge compliance with the PSA. U.S. Bank's

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standing to foreclose is established by the law, not the PSA. The law is clear U.S. Bank has
standing. The Peacocks' summary judgment motion must be denied.

AKERMAN LLP
/s/ Scott R. Stengel
Kathryn B. Hoeck, Esq.
Fla. Bar No. 0813060
Primary E-mail: kathy.hoeck@akerman.com
Secondary E-mail: patricia.blouin@akerman.com
Scott R. Stengel, Esq.
Fla. Bar No. 0079086
Primary E-mail: scott.stengel@akerman.com
Secondary E-mail: marilyn.cancel@akerman.com
Post Office Box 231
420 South Orange Avenue, Suite 1200
Orlando, FL 32802-0231
407-423-4000 phone
407-843-6610 fax
- and William P. Heller, Esq.
Fla. Bar No. 0987263
Primary E-mail: william.heller@akerman.com
Secondary E-mail: lorraine.corsaro@akerman.com
Las Olas Centre II
350 East Las Olas Boulevard, Suite 1600
Ft. Lauderdale, FL 33301
954-463-2700 phone
954-463-2224 fax
Counsel for U.S. Bank National Association as Trustee

CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on November 8, 2016, a true and correct copy of the
foregoing document was electronically filed with the Clerk of the Court using the Florida Courts
E-Filing Portal, and a copy was sent via e-mail to: April Carrie Charney, Esq.
(aprilcarriecharney@gmail.com), P.O. Box 576, Venice, FL 34284-0576; Daniel C. O'Rourke,
Esq. (dan@critzerlaw.com; lisa@critzerlaw.com), Critzer Law Firm, P.A., 12889 US Highway
98 W, Unit 110A, Miramar Beach, FL 32550-3241; and Vanessa D. Sloat-Rogers, Esq. and
Jonathan Meisels, Esq. (mail@rasflaw.com; service@rasflaw.com), Robertson, Anschutz &
Schneid, P.A., 6409 Congress Avenue, Suite 100, Boca Raton, FL 33487.
/s/ Scott R. Stengel
Attorney

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